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Thursday, February 2, 2012

How Globalization Nearly Exterminated the Buffalo

M. Scott Taylor (no relation!) offers a new and persuasive explanation of why the American buffalo population declined from 10-15 million in the early 1870s to about 100 by the late 1880s in "Buffalo Hunt: International Trade and the Virtual Extinction of the North American Bison." The article is in the December 2011 issue of the American Economic Review (which isn't freely available on-line, but many in academia will have on-line access to it through their library or a membership in the American Economic Association.)

Taylor summarizes his argument: "This paper examines the slaughter using theory, empirics, and first-person
accounts from diaries and other historical documents. It argues that the story of the buffalo slaughter is surprisingly not, solely, an American one. Instead, I argue that the slaughter was initiated by a tanning innovation created in Europe and maintained by a robust European demand for buffalo hides."

Of course, it's not a shock that the buffalo population declined as settlers spread across the western states in the mid-19th century. But the decline seemed to be happening gradually.

"By 1830, buffalo were largely gone east of the Mississippi. During much of this early period natives hunted the buffalo not only for their own subsistence needs but also to trade buffalo robes at forts and towns. A buffalo robe is the thick and dark coat of a buffalo that is killed mid-winter. Robes could be used as throws for carriages, or cut to make buffalo coats and other fur items. They were a common item in the 19th century, and they made their way to eastern markets via transport along the Missouri river to St. Louis or overland via the Santa Fe trail. In the 1840s settlers pushed through the Great Plains into Oregon and California. The movement of the 49ers to California and the Nevada gold rush years brought a steady stream of traffic through the Platte River valley. Subsistence hunting along the trail plus the movement of cattle and supplies divided the existing buffalo herd into what became known as the Northern and Southern herds.

"The division of herds became permanent with the building of the Union Pacific Railroad through the Platte River valley in the 1860s. While subsistence hunting for the railroad crews surely had some effect on buffalo numbers, as did the railroad’s popular day trips to kill buffalo, the harried buffalo herds withdrew from the tracks, creating a corridor centered on the Union Pacific line. The railroads also provided transportation for buffalo products to eastern and foreign markets, but in the 1860s railway cars were not refrigerated, and, hence, buffalo meat was marketed only as salted, cured, or smoked."

"Despite the railroads, the market for buffalo robes, the increase in subsistence hunting, and the conversion of the high prairie to agriculture, most observers expected the population to decline gradually as it had east of the Mississippi. The force of habitat destruction was minimal on the Great Plains. In 1860, they held only 164,000 people. Farms occupied less than 1 percent of the land area."

This pattern of gradual decline for the buffalo changed abruptly not long after 1870, when tanners in England figured out a way to tan buffalo hides for leather:

"The hardest evidence comes from a London Times article reporting from New York City in August of 1872. It reports that a few enterprising New Yorkers thought that buffalo hides might be tanned for leather, and when the hides arrived they were “sent to several of the more prominent tanners who experimented upon them in various ways, but they met with no success. Either from want of knowledge or a lack of proper materials, they were unable to render the hides soft or pliable, and therefore they were of no use to them.”

The report continues to note “several bales of these hides were sent to England, where they were readily taken up and orders were immediately sent to this country for 10,000 additional hides. These orders were fulfilled, and since then the trade has continued.” Further still, the methods are spelled out: “The hides are collected in the West by the agents of Eastern houses; they are simply dried, and then forwarded to either New York or Baltimore for export… The low price that these goods have reached on the English market, and the prospect of a still further decline, may in time put an end to this trade, but at present the hides are hunted for vigorously, and, if it continues, it will take but a few years to wipe the herds out of existence” (my emphasis). ...

The market for buffalo hides boomed; buffalo hunters already in the field—like George “Hodoo” Brown—started to skin buffalo for their flint (hairless) hides, and hundreds if not thousands of others soon joined in the hunt. Previous to the innovation, hides taken from the Southern herd or hides taken in all but three winter months were virtually worthless as fur items. The only saleable commodity from a buffalo killed in these regions or times was its meat, but this market was severely limited by transportation costs. With the advent of a flint-hide market, killing a buffalo anywhere and anytime became a profitable venture. By 1872, a full-scale hide boom was in progress."

Taylor acknowledges and discusses the standard explanations for the decline of the buffalo: hunting by the United States Army, the presence of the railroads, and changes in native American hunting practices. While each of these may have contributed a bit to the decline, his estimates suggest that demand from the global market played a central role: "[T]he newly constructed export data support the export-driven slaughter hypothesis, while the evidence for the alternative hypotheses that hold the railroads, the Army, or native Americans responsible is far weaker. The magnitudes of the implied export flows are considerable. My findings suggest approximately six million buffalo hides are exported over the 1871–1883 period, and this represents a buffalo kill of almost nine million."

Taylor boils down three crucial economic factors behind the buffalo slaughter: "[A] combination of a tanning innovation, open access to buffalo herds, and fixed world prices delivers a punctuated slaughter matching that witnessed on the Great Plains.... The slaughter is not a unique example of resource overuse created by burgeoning demand and poor regulation. It may, however, be unique in its scale, its speed, and the critical role played by international markets. ... Although the bison slaughter was a major event in US history, it was a minor event on the world stage. And being small on world markets meant that some of the typical insulating and signaling properties provided by a market price system were missing."

In short, when smaller countries and economies around the world express concern that combinations of new technology and global demand might devastate their natural habitat or resources, Americans should be willing to listen. In our own history, it's what nearly exterminated the buffalo.

As a coda, the slaughter of the buffalo was one of the events leading to the creation of an American environmentalist movement: "The slaughter of the North American buffalo surely represents one of the saddest chapters in American environmental history. To many Americans at the time, the slaughter seemed wasteful and wrong, as many newspaper editorials and letters to congressmen attest, but still, little was done to stop it. The destruction of the buffalo and the wanton slaughter of other big game across the West did, however, pay some dividend. The slaughter of the buffalo in particular was pivotal in the rise of the
conservation movement in the late nineteenth and early twentieth century. Almost all of the important players in the conservation movement experienced the slaughter firsthand—Teddy Roosevelt, John Muir, and William Hornaday. The creation of the national park system in general, and the Yellowstone herd in particular, reflect
the revulsion many felt to the Slaughter on the Plains."